German Chancellor Scholz kicked off his first visit to China on November 4. The German economic delegation accompanying him also attracted international attention. Among them, BASF, Wacker Chemical and Merck Group are the world's leading cosmetics ingedients enterprises. (Credit：website) Bloomberg mentioned that this is Scholz's first visit to China since he took office as German chancellor in December last year. 2021, China is Germany's largest trading partner, with merchandise trade between the two countries reaching €246 billion (about $241 billion). Earlier, data from China's Ministry of Commerce of The People’s Republic of China showed that from January to August 2022, the amount of foreign investment actually used in China reached 892.74 billion yuan (about $123 billion), up 16.4 percent year-on-year. And among them, German investment in China grew at a rate of 30.3%, second only to South Korea (58.9%). (Credit：BASF) In the cosmetics sector, BASF products mainly include surfactants, emulsifiers, polymers, emollients, active ingredients, pigments and UV filters, etc. BASF is also one of the several leading domestic suppliers of sunscreens in China. According to BASF 2022 third quarter earnings data, the company recorded third quarter sales of €21.946 billion (about $21.5 billion), an increase of 11.6% year-on-year. The third quarter earnings report showed that production of one of the company's main chemicals rose 6.9% year-on-year in China, a much higher increase than the 2.7% increase in North America, while production in the EU and Asia Pacific (excluding China) actually declined by 6.7% and 6%, respectively. Currently, Greater China is BASF's second largest market worldwide. BASF is also one of the largest German companies to have recently invested in China. The company recently announced that it would invest €10 billion (about $9.8 billion) by 2030 to build a new "integrated site" in Zhanjiang City, Guangdong Province, China, which is also BASF's largest single investment ever. (Credit：WACKER Group) Another notable company, German raw materials manufacturer WACKER, is also one of the world's silicone giants, whose silicone oils are used in toiletries and skin care products. WACKER Group sales in the third quarter of 2022 amounted to €2.13 billion (about $2.1 billion), up 29 percent from the same period a year earlier. full-year 2022 EBITDA is now expected to be in the range of €2.1 billion (about $2.05 billion) to €2.3 billion (about $2.3 billion). Christian Hartel, WACKER's President and CEO, has said that WACKER aims to increase group sales to more than €10 billion ($9.8 billion) by 2030, while maintaining a high level of profitability. In addition, on May 18, 2022, WACKER announced that it had completed the acquisition of a 60 percent stake in specialty silane producer Shandong Guike New Materials Co. With this acquisition, Shandong has become WACKER's second largest silicone production site in China, after Jiangsu. Christian Hartel, WACKER's president and CEO, said that the acquisition of a stake in Shandong Guike will enable WACKER to further expand its range of high-quality specialty products for the Asian market and to be closer to its customers in the fast-growing Asian consumer market. (Credit：ALAMY STOCK PHOTO) The global biotechnology giant Merck KGaA was also among the team that went on this trip. Merck was founded in 1668, as a veteran ingredient manufacturer, Merck has more than 350 years of experience in ingredient research and development and leading global pharmaceutical and chemical resources. Merck has a comprehensive line of cosmetic ingredients and has long provided quality products and solutions for global head brand owners including P&G, Unilever, L'Oreal, Estee Lauder, etc. According to the earnings report, Q3 2022 revenue was $14.959 billion, beating market expectations by 6.32%. Revenue of MERCK in H1 of 2022 was €10.77 billion (about $10.5 billion), up 13.31% year-on-year and its net profit of €1.75 billion (about $1.71 billion), up 17.16% year-on-year. Asia Pacific is MERCK's top market, with revenues of €3.78 billion (about $3.7 billion) in H1 2022, representing 35.13%, up 12.46% year-on-year. MERCK's China president, An Gaobo, has said that visionary multinational companies would continue to increase their share of the Chinese market. It is worth mentioning that the Chinese brand Pechoin and Merck reached an international strategic cooperation. The partnership will give new strength to the Chinese domestic beauty market and also bring consumers more high efficacy beauty products with technology content, said Pechoin. The German company's focus on the Chinese market has also sparked a lot of media buzz. As the German newspaper Handelsblatt has previously reported, more than 100 companies applied for the coveted seats on government jets, and 12 were finally approved, because business in China has never been more important than it is today. This may mean that the Chinese market will continue to be one of the main focuses of German headquarter companies. If there is any infringement, please contact us for timely removal.

On November 1, Baozun inc. announced that the Company's voluntary conversion of its secondary listing status on The Stock Exchange of Hong Kong Limited (SEHK) to a primary listing on the Main Board was effective immediately. In other words, Baozun is now a dual primary listing on the SEHK and NASDAQ. Shanghai Baozun E-commerce Inc.'s (Baozun) American Depositary Shares (ADSs) listed on NASDAQ and ordinary shares listed on the SEHK are interchangeable and investors may continue to hold their shares in either the ADSs traded on NASDAQ or the ordinary shares traded on the SEHK. Baozun, founded in 2007 and headquartered in Shanghai, is an e-commerce service company specializing in providing IT solutions, store operation services, and digital marketing services for brands and retailers. In the field of beauty, cooperative clients include Estee Lauder, Nivea, Clinique, MAC, and other well-known beauty brands. According to Baozun's previously announced second-quarter financial results, its GMV achieved a significant and solid growth of 38.4% to 40.084 billion yuan (about $5.5 billion) in the first half of the year, with total net revenue of about 4.106 billion yuan (about $564.2 million), down 5.1% year-on-year, of which service revenue was 2.732 billion yuan (about $375.4 million), up 14.7% year-on-year. And revenue from the beauty category was 193 million yuan (about $26.5 million), down 11% year-on-year. In fact, after the U.S. Holding Foreign Companies Accountable Act (HFCAA) came into effect, a number of Chinese stocks began to return to the Hong Kong stock market for listing, including Alibaba, which voluntarily converted to the dual main board listing on the Hong Kong Stock Exchange in July this year. How big is the demand for the Chinese brand operation market? Data from Intelligence Research Group showed that in 2019, the transaction size of the e-commerce agency industry was 1407.6 billion yuan (about $193.4 billion), with a compound annual growth rate of 44% over five years. Currently, the brand agency operators are mainly concentrated in 3 major platforms Ali, JD, and Pinduoduo. With the catalyst of the pandemic in 2022, the online channel ushered in another period of incremental development, and the digital transformation of the brand of e-commerce has accelerated. Guoyuan Securities released a report estimating that the size of the branded e-commerce service industry is expected to reach 2.04 trillion yuan (about $280 billion) in 2025. International big brands have a higher demand for brand agency operations. According to the data of iResearch, the current demand rate of international brands for agency operators is 80%-90%. And with the continuous rise of innovative Chinese brands, traditional local brands in the channel change in the rapid transformation, accelerate the construction of online channels, and the demand of local brands for brand service providers will also rise. With this listing, Qiu Wenbin, the Founder, Chairman, and CEO of Baozun, said that through its primary listing on the Hong Kong Stock Exchange, Baozun expected to further expand its investor base, provide more liquidity for its company's securities, and bring more convenience and flexibility to its company's investors and stakeholders.

By geography, Estee Lauder Group’s net sales were negative in all major regions. (Credit: from website) Recently, Estee Lauder released financial data for the first quarter of the fiscal year 2023 (July to September 2022). Total Group net sales for the last quarter were $3.93 billion, which declined 11% year-over-year, with organic sales down 5%. However, the latest Tmall Double 11 list shows that the Estée Lauder brand remains in the TOP five of several lists, and Jo Malone and Tom Ford fragrances also performed relatively well, indicating that there is still an advantage in the Chinese market. The downtrend in skincare and color cosmetics Fabrizio Freda, President and CEO of Estee Lauder Group, said that despite the many external pressures still faced in the first quarter, such as high global inflation and strict anti-pandemic policies in China, the Estee Lauder Group still achieved organic sales in line with expectations. In terms of specific results, the skin care segment continued to account for the highest percentage of sales, with net sales of $2,104 million last quarter, down 14 % year-over-year. In response, Estee Lauder said significant factors impacting last quarter's revenue included travel retail restrictions due to China's prolonged and strict pandemic control measures, as well as Chinese and international retailers beginning to tighten inventory. As a result, the Estee Lauder brand was unable to rescue the brand's overall sales decline, despite the launch of new serums and eye creams, which brought some incremental growth to its performance. In addition, Dr. Jart+ and Origins also saw a decline in sales. However, sales of brands such as La Mer, Bobbi Brown, and The Ordinary still maintained growth. Bobbi Brown, in particular, achieved double-digit net sales growth in every region, driven by its foundation and makeup remover products. Also affected by the travel retail channel, the color cosmetics segment saw a 10% decline in net sales to $1,025 million, with Estee Lauder and Tom Ford beauty sales declining. However, M-A-C achieved high single-digit net sales growth, benefiting from the recovery of brick-and-mortar stores. The fragrance segment was essentially flat with net sales of $607 million, impacted by the termination of licenses for some designer fragrances, although the remaining major fragrance brands all achieved strong growth, such as Tom Ford fragrances and Le Labo, which achieved double-digit growth, and Jo Malone, which achieved high single-digit growth. Hair Care net sales were $158 million, up 7% year-over-year, which was the only major segment to achieve positive growth. Key drivers of growth included Aveda and others. (Credit: Estee Lauder earnings report) Decrease by 15% in Asia Pacific Geographically, Estée Lauder Group’s net sales were negative in all major regions. In particular, net sales in the Americas declined 6% year-over-year to $1,123 million as retailers tightened inventory management, although net sales in Latin America increased by double-digits as the cosmetics category sold well. Net sales in Europe, Middle East, and Africa declined 10% to $1,682 million, also constrained by the travel retail channel, with only India, Turkey, Spain, Italy, and Germany posting modest growth. Overall sales in Asia Pacific decreased 15% to $1,130 million, with growth in fragrance and hair care products unable to fully offset the decline in skincare and color cosmetics. Declining sales in brick-and-mortar stores in Greater China continued to be one of the main factors, with travel retail also declining in South Korea. However, Thailand, Malaysia, and Japan showed positive growth. (Credit: Estee Lauder earnings report) Although Asia Pacific sales was in negative growth, China is still an important market for Estée Lauder. In fact, in mainland China, Estée Lauder Group has already achieved good performance in this year's "Double 11" promotion. According to official Tmall data, from the official opening of the sale at 8 pm on October 31 to 24 pm on November 1, Estée Lauder ranked second in the beauty industry and beauty and skincare category and fourth in the color cosmetics category, with Jo Malone and Tom Ford ranked first and third in the fragrance and aromatherapy industry respectively. Expansion, reorganization ...... Estee Lauder seeks growth In the fiscal year 2022 annual report, Estee Lauder has said that taking into account the termination of some product line licensing agreements and the deterioration of multiple macro environments such as the Russian-Ukrainian conflict, net sales in the next quarter are expected to decline by 10% to 8% compared to the same period last year. From the performance of this earnings report, Estee Lauder's performance decline was within expectation. In fact, in order to achieve performance growth and stable and sustainable development of the company, Estee Lauder has made a number of adjustment measures in the last quarter. In September, Estée Lauder announced the consolidation of the company's brand portfolio into two brand clusters under the leadership of Jane Hertzmark Hudis, the Executive Group Presidents, and Stéphane de La Faverie, in line with the company's long-term, sustainable growth strategy. Estée Lauder said this new brand leadership structure is designed to ensure continued consistency in the portfolio of similar products, allowing the business to focus on the greatest areas of opportunity. Fabrizio Freda said the integration will further enable Estée Lauder Companies' brands to win over consumers in a complex and ever-changing beauty market, while enhancing the talent pool and organizational planning within the group, enabling Estée Lauder to better and more flexibly implement the company's long-term strategy. Jane Hertzmark Hudis, who previously headed the Estee Lauder, Origins, and Beauty Bank, will continue to focus on skincare and hair care, leading La Mer, BOBBI BROWN, Tom Ford Beauty, M-A-C, Clinique, Origins, Aveda, Bumble and bumble, Dr. Jart+, and other brands. Another cluster of brands led by Stéphane de La Faverie includes Estée Lauder, AERIN Beauty, Jo Malone, LE LABO, KILIAN PARIS, Editions de Parfums Frederic Malle, Darphin Paris, LAB Series, DECIEM (including The Ordinary, NIOD, and Avestan), Too Faced, Smashbox, GLAMGLOW. In addition, in August this year, Estee Lauder announced that it was working with luxury brand Balmain to create a beauty brand, Balmain Beauty, with products expected to be officially launched in the fall of 2024. On the day of the official announcement, Guillaume Jesel was also appointed as the Global President of Tom Ford Beauty, Balmain Beauty, and Luxury Business Development, and is also responsible for the overall strategic direction, global development, management, and growth of Tom Ford Beauty and Balmain Beauty going forward. Although Balmain's beauty line is currently largely dormant, its history in the beauty industry can be traced back to the launch of its first fragrance Vent Vert in 1947. 2017 also saw Balmain launch a limited edition lipstick in association with L'Oréal Paris. In personal care, its hair care brand Balmain Hair Couture was also founded more than 40 years ago. Balmain can be said to have accumulated a considerable part of experience in the beauty field, so some analysts believe that Estee Lauder's move or want to copy the success of Tom Ford beauty and then create a high-growth beauty brand. For the next quarter, Estee Lauder said that compared to the same period last year reported net sales were expected to decline by 19%-17% and organic net sales declined by 11%-9%. Overall, Estee Lauder expects reported net sales to decline 8-6% in fiscal 2023.

Rogers said, "I am honored but also energized to have the opportunity to lead my grandmother’s company as we begin our 60th anniversary year" (Credit： Mary Kay) Recently, Mary Kay announced that Ryan Rogers, the third generation of the founding family, will become Chief Executive Officer of Mary Kay, Inc., effective on January 1, 2023. With Rogers taking office, David Holl, the current chairman of the board and CEO, will retire at the end of this year. David Holl has been with Mary Kay for nearly 30 years and will continue to serve as chairman of the board. Rogers, a member of the company's board of directors, currently serves as Chief Investment Officer, responsible for strategic direction, financial analysis, and resourcing of key investments in Mary Kay's local and international subsidiaries. “As a young man, my grandmother predicted I would someday lead her company and worked to prepare me by sharing many of her lessons in leadership,” said Rogers, “I am honored but also energized to have the opportunity to lead my grandmother’s company as we begin our 60th anniversary year.” Rogers began his career as an auditor in the Transaction Services Group in the Dallas office of PricewaterhouseCoopers (PwC) and joined Mary Kay Inc. in 2000 as a financial analyst. Prior to becoming Chief Investment Officer in 2013, he held a variety of positions, including project manager, director of strategic planning, and vice president of strategic planning. He has also served as vice chairman of the Mary Kay Ash Foundation since 2001. He received his undergraduate degree in business from Southern Methodist University and became a certified financial analyst in 2002. Mary Kay Inc. was founded in September 1963 in Dallas, Texas, by Mary Kay Ash. Today, Mary Kay is a multi-billion dollar company with millions of independent beauty salespeople selling its products in nearly 40 markets around the world. David Holl joined Mary Kay in 1993 and became Chief Financial Officer in 1996. In 2001, he was named President and Chief Operating Officer, and in 2006, became President and Chief Executive Officer. And in 2018, he became chairman of the board and Chief Executive Officer. David has led Mary Kay's global brand innovation, shaping the company into a top cosmetic brand and further expanding its R and D to more than 800 products worldwide. He also led the company's investments in factories and corporate facilities in China and completed the $100 million Richard R. Rogers (R3) Manufacturing and R&D Center in Louisville, Texas, in 2018. David will continue to serve as chairman of Mary Kay's board of directors after stepping down as CEO. Richard R. Rogers, co-founder of Mary Kay Inc. and son of Mary Kay Ash, will continue to serve as executive chairman. Source： Mary Kay If there is any infringement, please contact us to delete.

In recent times, a number of international beauty giants have been caught in the controversy that their cosmetics caused cancer. Among them, the sunscreen, and color cosmetics category has a wide range of titanium dioxide, and the history of use has also been questioned. (Credit: from website) Although the European Union has long listed titanium dioxide as a carcinogen, many industry insiders said that the impact of smeared cosmetics is not significant, there is no need to be concerned about these ingredients. Eye shadow allegedly causes cancer because of one ingredient The incident began when L'Oreal's U.S. color cosmetics brand Urban Decay was accused by Environmental Health Advocates ("EHA") of selling an eyeshadow palette containing inhalable titanium dioxide. In connection with this matter, Entorno Law said in a public filing that the brand continued to expose customers to carcinogens by failing to stop selling them even after it was already aware of the violation. What is titanium dioxide? Why is it linked to carcinogens? Public information shows that titanium dioxide is an inorganic compound with the chemical formula TiO2, which is considered to be one of the best performing white pigments in the world today. It can be used in paint, ink, plastic, rubber, paper, and other industries, but also as a food coloring agent, as well as widely used in sunscreen, and powder cosmetics. As early as 2010, the International Agency for Research on Cancer (IARC) classified titanium dioxide as a Class 2B carcinogen. Ten years later, the EU also finally identified titanium dioxide as a Group 2 carcinogen. On February 18, 2020, the European Commission included respirable titanium dioxide as a class 2 suspected carcinogen based on the proposal. EU regulated that containing greater than or equal to 1% titanium dioxide powder, and particle size less than or equal to 10 microns of liquid mixtures should add the label warning label: note, respirable harmful micro-droplets will be formed when spraying, so do not inhale the spray or mist. For the products containing greater than or equal to 1% titanium dioxide solid mixtures, it is necessary to label: Note, respirable harmful dust will be formed in the use, do not inhale dust. Since then, the controversy about titanium dioxide carcinogenic has not been broken, for example, rainbow candy produced by Mars company was jointly sued by United States California consumers because of the addition of excessive titanium dioxide, they believe that titanium dioxide can damage human DNA, leading to genetic mutations and cell cancer. For the problem that cosmetics containing titanium dioxide are carcinogenic, a chief physician from the Hunan University of Chinese Medicine replied that titanium dioxide for experimental animals' carcinogenicity is clear, but there is no sufficient evidence to prove that humans have a carcinogenic effect. If it is produced by regular manufacturers, titanium dioxide content does not exceed the standard, adding a titanium dioxide liquid composition of cosmetics can be used normally. As you can see, the risk of titanium dioxide needs to pay attention to the premise of "inhalable". If it is a spray sunscreen, or powdered loose powder, when using must pay attention to hold your breath to avoid breathing into the lungs. Several industry insiders who in charge of factory produced color cosmetics told CHAILEEDO that titanium dioxide is mainly the risk of inhalation, there is no significant impact on the application of sunscreen, primer, and other products. "For cosmetics containing titanium dioxide that applied to the skin, the amount that can be volatilized into the air is very small, and then through breathing into the lungs content, basically negligible. Therefore, the daily use of skin care products containing titanium dioxide does not worry about the inhalation of the deposition in the lungs to harm the human body." A research and development engineer also expressed similar views. It can be seen that ignoring the dose and form to talk about the harm is not desirable. (Credit: from website) The ingredients are widely used in sun protection, color cosmetics According to Market Monitor data, the global titanium dioxide market size reached 123.993 billion yuan (about $17 billion) in 2022, China's titanium dioxide market in a global market share of 36.49%. The report predicts that the global titanium dioxide market size will reach 204.978 billion yuan (about $28.2 billion) by 2028. From 2022 to 2028, the compound annual growth rate CAGR is 8.71%. Due to its low price and excellent concealing effect, titanium dioxide has also long become an indispensable ingredient in cosmetics. From the ingredients itself, titanium dioxide belongs to the natural mineral powder, which is a very important type of base material in cosmetics. It is widely used in color cosmetics. In the fragrance powder category, (such as ordinary fragrance powder, powder, toner, etc.) the amount of products can be as high as 30% to 80%. In addition to titanium dioxide, commonly used natural mineral powders include zinc oxide, talc, etc., which are also commonly used as physical whitening ingredients. Among them, titanium dioxide has the whitest color and the strongest coverage and can be mixed with zinc oxide to improve the whitening and concealing effect. According to another person in charge of research and development of Mianhuatang, which focuses on color cosmetics, micron-level titanium dioxide is mainly used as a cover-up and colorant and nano-level titanium dioxide is mainly used in sunscreen products. "From the application point of view, most of the current color cosmetics, especially the formulation of primer products will be added to titanium dioxide, the formula ratio can reach more than 8% and concealer products to more than 30%." (Credit: from website) It is not advisable to cosmetics caused cancer Cosmetics caused by cancer will not only make the brand influence greatly reduced, but also make the product lose consumer trust, and even cause panic. But as mentioned earlier, it is not advisable to talk about toxicity aside from dosage. For example, the dioxane incident shocked the industry a few years ago. Although dioxane is also classified as a carcinogen, it should be noted that trace amounts of dioxane are commonly found in nature, and Health Canada has stated that the presence of trace amounts of dioxane in cosmetics does not pose a health risk to consumers, or even to children. In Australia, the National Occupational Health and Safety Council has concluded that the ideal limit for dioxane in consumer products for daily use is 30 ppm, and the toxicologically acceptable upper limit is 100 ppm, while China's limit of 30 ppm for dioxane in cosmetics after 2012 is far below the toxicologically acceptable upper limit of 100 ppm. So, in many cases, determining whether an ingredient or a product is harmful to humans needs to be based on a large amount of experimental evidence, not just because it is listed as a carcinogen. Similarly, the brand argues for the safety and effectiveness of the product but also needs to have a basis. If there is any infringement, please contact to delete.

LVMH's largest consumer private equity fund has settled in China, marking that L Catterton's China team will cover the full cycle of investments in consumer sectors including overseas, beauty and personal care in both RMB and USD. (Credit: L Catterton official website) Recently, L Catterton, the world's largest consumer private equity fund under LV, completed the first closing of its first RMB fund, which has a target size of 2 billion yuan (about $275 million), and the first closing amount exceeded expectations. At the same time, L Catterton officially announced its Chinese name "路威凯腾" (Lu Wei Kai Teng) and the first phase of its RMB fund in Chengdu High-tech Zone. L Catterton was formed by the merger of two funds in 2016. Catterton, a U.S. consumer private equity fund covering North America and Latin America, and L Capital, a private equity and real estate business covering Europe and Asia, which belongs to LVMH and the Arnault Group, the holding company of the Bernard Arnault family. Following the merger, L Catterton leapt to become the world's largest consumer private equity fund. Today, L Catterton has 9 investment platforms worldwide, offices in 17 cities, a team of over 190 people and over 250 cumulative investments. The LPs contributing to the L Catterton RMB Fund are mainly composed of local financial contribution platforms and domestic and overseas industrial contributors. Among them, Chinese domestic and international industrial LPs include industrial capital of global head consumer companies, food and beverage industry giants, beauty and apparel listed companies, etc. Phase I of L Catterton RMB Fund will focus on early-stage consumer investments, which marks L Catterton China team's full-cycle coverage of eight consumer segments, including overseas, beauty and personal care, food and beverage, pet, healthcare, consumer technology, new retail and apparel fashion, in both RMB and USD. Li Jing, Head of L Catterton RMB Fund, said, "As the world's second largest commodity consumer market, China has a significant market scale advantage, along with the continued upgrading of the consumption structure. L Catterton is long-term optimistic about the development of China's consumer industry. We look forward to helping our portfolio companies and partners to jointly complete the grafting of industry resources globally, upstream and downstream business resources, and actively establish international ecological cooperation on a global scale." At this point, L Catterton's global capital management scale has exceeded $33 billion. (Credit: from website) Currently, L Catterton has invested in a number of beauty companies, including Chinese beauty and skincare brand Marubi. It is worth noting that in May this year, Marubi disclosed in the announcement that the company received the "Report on Change of Equity in Simplified Form of Guangdong Marubi Biotechnology Co., Ltd" from L Capital Guangzhou Beauty Ltd, a shareholder holding more than 5% of the company's shares, on May 22, 2022, in which L Capital reduced its holding of 6,908,340,000 shares through bulk trading, representing a reduction of 1.71926%. In response to the reason for this shareholder reduction, Marumi had said in the announcement, "In view of the long time of L Capital's shareholding in Marubi, as an equity investment company, it has its own capital exit needs." Some industry insiders believe that "after the decline of Marubi's performance, shareholders have no investment patience." Source: L Catterton Officialy If there is any infringement, please contact to delete.

P&G will exhibit for the fourth consecutive year at the 5th China International Import Expo (CIIE) in Shanghai from November 5 to 10, bringing a wide range of its global brands and demonstrating its commitment to sustainable development for Chinese consumers. (Credit: P&G China official account on Weibo) According to P&G's official WeChat public account, P&G will once again be present at the 5th CIIE. At the expo, P&G will bring several of its brands to China for the first time, including FARMACY, a natural and clean skincare brand, TULA, a new probiotic skincare brand, and OUAI, a hair care and lifestyle brand founded by a Hollywood celebrity hairstylist. In addition to the brands shown to Chinese consumers for the first time, P&G will also showcase its brand's newly upgraded star products, such as Head & Shoulders Specialized Scalp Shampoo, Downy Clothes Care Retention Beads, and OLAY Derm Standard Spot Fading Essence. For product upgrades, P&G said it aims to create a high-quality experience more suitable for Chinese people. In addition, after announcing the Mission 2030 and Net Zero 2040 sustainability goals at the CIIE two years ago, P&G also said it would release important updates on the sustainability goals at this year's expo, as well as progress in key challenge areas such as climate change, waste and water in the past year. At last year's CIIE, P&G unveiled its first double-easy certified innovative e-commerce packaging "Air Capsule", which attracted a lot of attention. This year, the packaging will be presented again at the Expo, bringing the world premiere of an upgraded version that incorporates recycled plastic PCR into the materials used for production. This time, in addition to the PCR material air capsule, there are dozens of designs of the "air capsule" for different industries and product packaging. P&G aims to open up the packaging to large-scale industry applications and work with industry partners to help make more e-commerce packaging recyclable, more environmentally friendly and convenient in the future. (Credit: P&G official) According to P&G's recently released earnings report, net sales for the July-September period were $20.6 billion, a slight increase of 1% year-over-year. Excluding the impact of foreign exchange, acquisitions and divestitures, organic sales increased by 7%. The net profit was $3.963 billion, down 4% year-over-year. Benefiting from price increases under the innovation-driven strategy, the beauty and skincare segment's organic sales increased 4%, with net sales of $3.961 billion. Organic sales of skin and personal care products increased by mid-single digits. P&G CEO Jon Moeller said that in a very difficult cost and operating environment, P&G still achieved more objective results. Supported by these results, P&G will continue to maintain an integrated strategy in the future to meet the current challenges and continue to achieve the right strategy to balance growth and value creation. In this environment of slight growth, P&G is looking forward to the re-appearance of the Group at the Expo, and is looking forward to once again presenting its global condensed results to the mature consumer base in China and decoding a better future. Source: P&G official WeChat public account If there is any infringement, please contact to delete.

Beauty giant L'Oreal sold 27.94 billion euros ($27.3 billion) in the first three quarters, up 12 percent year-on-year. North Asia, where China is located, grew by only 7.4% due to China's strict pandemic control measures. Even so, North Asia remains the second largest market for L'Oréal. On October 20, L'Oréal released its financial data for the third quarter of 2022. The financial data showed that for the three quarters ended September 30, 2022, L'Oréal Group achieved sales of 27.94 billion euros (about $27.3 billion), up 12% year-on-year. The Group achieved sales of 9.575 billion euros (about $9.36 billion) in the third quarter, up 9% year-on-year. Growth across all four divisions By division, L'Oréal's four divisions, Professional Products, Consumer Products, L’Oreal Luxe, and Active Cosmetics, all achieved significant growth in the first three quarters of 2022. Active Cosmetics led the growth with 22.6%, with sales of 3.85 billion euros ($3.77 billion). The division strengthened its channel strength by deepening its partnership approach with healthcare professionals and grew much faster than the dermocosmetics market. La Roche-Posay remained the main driver of the division's performance, while CeraVe was the fastest-growing brand and brands such as VICHY and SkinCeuticals also achieved accelerated growth. It is worth mentioning that the division completed the acquisition of Skinbetter Science, an American skincare brand, in the third quarter. According to L'Oreal's previous presentation, Skinbetter Science has now become one of the fastest growing medical skincare brands in the United States, known for developing innovative products with active ingredients for anti-aging, moisturizing, cleansing, exfoliating and sun protection. The second fastest-growing division was L’Oreal Luxe with sales of 10.48 billion euros ($10.25 billion) in the first three quarters, up 12.2% year-on-year. The division achieved strong growth in emerging markets such as Europe and Latin America, while the fragrance business in North America was a strong driver. However, L'Oréal also mentioned that the pandemic prevention and control measures in the China region and Hainan also had a significant negative impact. In terms of brands, the perfume market was led by sales of Libre by YSL Beauty, La Vie est Belle by Lancôme, and Paradoxe and Armani Code by Prada. In skincare, brands such as Lancôme and HR maintained huge growth momentum in the ultra-high-end market. For color cosmetics, YSL Beauty, Lancôme and Shu Uemura brands led the gains. It is worth mentioning that a new luxury fragrance brand division was established within L’Oreal Luxe this week. The new division president, Sandrine Groslier, said the goal of the new division is to enable its fragrance brands to achieve more stable and sustainable growth in the global fragrance industry's rising environment and to develop the L'Oréal Group's mono-axis fragrance brands. The Mass Cosmetics Division ranked last with a growth rate of 8.7%, with sales of 10.34 billion euros ($10.11 billion). The main performance drivers came from Maybelline's Superstay Vinyl Ink lipstick and NYX's concealer serum, as well as L'Oréal Paris and Garnier in the hair care segment. The Professional Hair Care division grew 10.9% year-on-year, with sales of 3.25 billion euros ($3.18 billion) in the first three quarters. The division performed well in India, Mainland China, Brazil and Germany. The main performance was driven by the continued growth of brands such as Kashi and L'Oréal Paris Salon. North Asia market grew by only 0.3% in the third quarter By geography, overall L'Oréal grew across all divisions and all regions, significantly outperforming the global beauty market. L'Oréal achieved a relatively solid performance in the third quarter and continued to grow at a more stable rate compared to 2019, said Nicolas Hieronimus, CEO of L'Oréal. Among the five performance segments, the fastest growing segment in the first three quarters was SAPMENA-SSA (South Asia Pacific, Middle East, North Africa, Sub-Saharan Africa), which grew at a rate of 25.4% despite overall sales of 2.19 billion euros ($2.14 billion), with third-quarter sales reaching 30%, well ahead of the Group's overall growth rate. However, North Asia, where China is located, grew at a significantly lower rate than other regions, with growth of only 7.4% in the first three quarters and sales of 8.03 billion euros (about $7.85 billion), and only 0.3% in the third quarter, with sales of 2.41 billion euros (about $2.39 billion). Even so, North Asia is still the second largest market for L'Oréal. According to the financial report, the slowdown in North Asia was due to strict pandemic control measures in China, and the beauty market in the region remained negative in the third quarter. Against this backdrop, however, L'Oréal Luxe still gained new market share and other business units continued to consolidate their positions in e-commerce, with L'Oréal Paris skincare ranking first in the TikTok China. L'Oréal said in its earnings report that the global beauty market remains dynamic and consumer demand for beauty products remains unchanged. The combination of a strong business model, agility and the commitment of a global team has enabled L'Oréal to once again significantly outperform the market and consolidate its position as the world's number one beauty company. Despite the current uncertainty, we remain confident in the outlook for the global beauty market, which reaffirms its resilience. We still have confidence in innovation. We outperform the market and deliver another year of sales and profit growth in 2022." In fact, L'Oréal also continued to strengthen its investment and build its business in Asia in the second half of the year. In September, L'Oréal China's venture capital firm Shanghai Meicifang Investment Co. completed its first investment, making a minority investment in local high-end Chinese perfume and fragrance brand DOCUMENTS. This groundbreaking move further confirms the importance of the Chinese market in L'Oréal's global layout and highlights the important strategic deployment of Chinese beauty brands in Meicifang's future investments. In October, L'Oréal Group broke ground for the world's first self-built intelligent operation center and put into operation the 100,000-grade cleanroom of L'Oréal Suzhou Shangmei factory. The start of production means that L'Oréal China has become the first market where the Group has invested in an intelligent operation center and a cleanroom. According to L'Oréal, this series of investment initiatives once again demonstrates the Group's commitment to continuous investment in China and its long-term confidence in the Chinese market.

In recent years, China's cosmetics market has grown rapidly, ranking second in size at $81.1 billion in 2021, with a 15.5% share, making it the second-largest consumer of cosmetics in the world. Euromonitor predicts that Premium beauty sales are expected to grow at a compound annual growth rate (CAGR) of 13%, with the Premium beauty market growing further to 53% by 2025. It is safe to say that the premium beauty market in China is one of the most promising opportunities today. International brands have been very bullish on the Chinese market. L'Oréal Paris ranked the No.1 beauty brand in the 6.18 Shopping Festival on Tmal in June this year. Estée Lauder announced strong double-digit growth in online sales in Asia Pacific in its FY2022 figures. And Shiseido released its FY2022 first-half earnings report, with China surpassing Japan as its top market. Currently, many international companies have now made investments in China. For example, L'Oreal has invested in the Chinese fragrance brand Documents and Shiseido has invested in the Chinese recombinant collagen ingredient company NEO-HEALTH. In addition, according to U.S. Department of Commerce data showed that in 2020, the U.S. exported $838 million of personal care and cosmetic products to China, up 2.2% from the previous year. However, since January 1, 2021, the Cosmetic Supervision and Administration Regulation has been in effect, and China's cosmetic regulation has entered the 2.0 era. The regulatory environment in China can be challenging for foreign companies, with many barriers to entry. All cosmetic products sold through traditional channels (except for cross-border e-commerce channels) must be approved by the National Medical Products Administration (NMPA). In addition, there are many overseas companies concerned about exemptions from animal testing. The NMPA officially released the Provisions for Management of Cosmetic Registration and Notification Dossiers, which went into effect on May 1, 2021. The regulations state that manufacturers of common cosmetic products that have obtained the relevant qualification certification of the product quality management system issued by the government supervisor of the country (region) where they are located, and where the results of the product safety risk assessment can adequately confirm the safety of the product, are exempted from submitting the toxicology test report of the product. This means that overseas cosmetics that meet the relevant conditions may be exempt from animal testing. ZMUni is a professional third-party technical service consultancy, it provides a comprehensive range of services for beauty and personal care products to ensure regulatory compliance. CHAILEEDO is honored to invite ZMUni to share an analysis of related policies on Chinese beauty cosmetics. Q: What kind of company is ZMUni? What kind of vision do you have? A: ZMUni is a consulting company with a team of over 60 full time consultants. We mainly specialize in product compliance for cosmetics, food, and other categories in the Chinese market. Our vision is to Become a leading company for global product compliance and quality management. Q: What beauty brands does ZMUni have partnered with? A: We have already partnered with cosmetic brands from many countries,like Sesderma, Germaine de Capuccini, Skeyndor, MSB, etc. Q: Why do overseas beauty brands want to enter the Chinese market? A: According to the Customs statistic data, in September 2022, for the beauty cosmetics, the import mass of washing and personal care category reached 37,160.1 tons and 13.82 billion yuan. Though it decreased 20.97 percent from the same period last year, the Chinese cosmetic market is still the world's second largest cosmetic market. It is still one of the most promising markets in the world with 1.4 billion people. Q: What are the steps for overseas beauty brands to enter the Chinese market? A: We can divide the process into 3 stages for importing cosmetics through general trade. 1)The first stage is to Authorize a Chinese responsible person(company) and fulfill the Product compliance 2)Export products to China 3)Sell products in China Q: What kind of cosmetics will be called overseas cosmetics? A: According to Cosmetics Registration and Filing Administration Measures, If the last step of the manufacturing process, which always means the filling step, we mean, this step involves contacting the cosmetic contents right. If the filling step is completed in overseas, then it shall be managed as the imported product. For example, a lotion product is manufactured in France and exported to China as semi-finished products or raw material packed in big containers, then it is filled into bottles and packaging in China, then it is a domestic cosmetic in China. Q: When it comes to declaration at China customs, how are cosmetics classified? (How to distinguish between ordinary and special) A:Cosmetics can be classified into two kinds–either special or general. Special cosmetics require pre-market registration and general cosmetics require pre-market filing. If your product claims to help with Spot Removal, Whitening, Sun Screening, Hair Dyes, Hair Perms, Anti-hair Loss Or claims a new efficacy, then it is a special cosmetic. Everything else is a general cosmetic. Q: What tests are required for the import of overseas cosmetics into China? How long does it take for these tests to be carried out? A: During Cosmetic Filing and registration period, Physical and chemical (Heavy metal,etc.) testing items, Microbial testing items, Toxicology testing, Hazardous substance testing, Efficacy evaluation testing are required. For a general cosmetic, it takes about 30-60 days. For a Special cosmetic, it takes about 3-6months. Q: What changes have occurred in the current animal testing regulations in China? What impact do these have on imported cosmetics? A:It is finally possible to enter the Chinese market without having to conduct animal testing. However there are certain conditions that you must meet. First, it only applies to general cosmetics. Second, your QMS certificate must be issued by a local authority. Third, Your product must not be intended for infants or children. Fourth, Your product must not use new ingredients that are still in their safety monitoring period. And last, the filing person, the Chinese responsible person and the manufacturer must not have any bad records in China. Q: What is the most problematic part of the procedure that many beauty brands encountered with when entering the Chinese market? What are the countermeasures? A:For those brands looking to sell in China, they need to be aware that regulations on imported cosmetics are now stricter than ever before. First, the brand trademark shall be registered in China. Second, cosmetic ingredients shall meet the requirements of IECIC(Inventory of Existing Cosmetic Ingredients in China) 2021 and other regulations. Third, the cosmetic claims shall fall in the cosmetic definition in CSAR. Q: 2021 is the year of the new regulations introduction, a series of policies and standards were out. This year, the regulations have been implemented, companies have reformed to cope with the new regulations. How do you think beauty brands should face the policy changes in China? A: These new regulations upgrade all-round on supervision and administration, which serves the cosmetic industry and consumers better. It is worth noting that several changes are very critical for oversea brands. First, the Cosmetic classification has changed, as we explained a moment ago. Second, new cosmetic ingredient application is much more easier and quicker through online portal. Third, the cosmetic Claims require claim substantiation. That is to say, you need solid evidence to support your claims. Fourth, safety assessors and assessment reports are required. Fifth, enterprise obligations are specified for filing and registration person. Those are just changes in a nutshell. The actual application is way much more complicated. If you can find a cosmetic compliance partner like ZMUni in China, it can facilitate your access to the Chinese market by complying with all the national and local regulations. Q: Is it a good time for beauty brands to enter China now? A: Yes, i'm sure it is. Because we've seen positive signs from many perspective. For example, our people are affluent than before and they have spend more money on the pursuit of daily beauty in China in recent years. And the market atmosphere is very promising, we have seen great development of new marketing social media platform, like douyin, the chinese version of tiktok, and xiaohongshu, etc. Beside, offline selling channels are also expanding. Most evidently, So many successful cases of Overseas brands have entered the Chinese market, which could be a good model for others. Q: What make a brand suitable for the China's Market? A: First, I think if there are competitors locally, and the competitors has shown a rising trend, then the brand basically can be assured that the consumer demand is validated. Then, as an oversea brand, you has to own your unique selling point, specially the novelty, which is definitely a craze among Chinese consumers. and whether your brand can provide an exact situation why Chinese consumers need the product. Only you have specific brand position and localized purchase decision scenarios, consumers can recognize your values.

In the first nine months, some listed Chinese local beauty companies were happy and some were worried. Shanghai Jahwa ranked first down 8.17% year-on-year while Lushang Development (cosmetics business) rose 44% year-on-year. However, with the boom in efficacy skincare in China, the revenue scale of beauty companies is also expected to continue to maintain high growth. On the evening of Oct. 28, after the release of third quarterly report of Bloomage Biotech, the first three quarters performance of China's local beauty listed companies have also been basically disclosed. After analyzing the three quarterly earnings reports released by nine beauty listed companies, CHAILEEDO found that in 2022, the pattern of Chinese local listed beauty companies may usher in a historic change. That may also determine the the competitive trend of Chinese cosmetic companies and brands in the next 10 years. It also foreshadows the new golden era belonging to the Chinese domestic beauty is coming. Bloomage Biotech’s annual revenue may exceed 7 billion From the nine listed companies of beauty/daily chemical-related brands according to CHAILEEDO, Shanghai Jahwa is still the largest Chinese local beauty listed company in terms of revenue from January to September this year, ranking first with a revenue of 5.354 billion yuan(about $737 million). However, influenced by the epidemic sealing and control in Shanghai, logistics obstruction, Shanghai Jahwa's revenue declined compared to the same period last year, and its net profit fell by 25.51%, the highest decline in a number of beauty companies. It is worth mentioning that Bloomage Biotech, PROYA, Botanee, Lushang Development four companies have achieved a double-digit increase in revenue from January to September this year. Among them, the revenue growth of Lushang Development is the largest, 44%. The net profit growth rate of Botanee is 45.62%, which leads a number of beauty companies. For the growth of revenue in the first three quarters, Bloomage Biotech said in its financial report that it was mainly due to the fast growth of the company's functional skincare products revenue, while Botanee's financial report also showed that its revenue still maintained a 37.05% growth in the first three quarters, mainly due to the further improvement of its products and brand awareness, and the fast growth of sales scale and sales revenue. It can be seen that Dr.Alva, PROYA, Winona, or QuadHA, BIOHYALUX are all in the same sector, it is not difficult to find that the efficacy of skincare made great contribution to the enterprise revenue. With the further expansion of the market scale of efficacy skincare, the revenue scale of the above companies is also expected to continue to maintain high growth. Based on this background, CHAILEEDO has made a forecast of the annual revenue of major companies based on the average data of the ratio of revenue to annual revenue in the fourth quarter of 2020 and 2021. Taking Botanee as an example, according to the financial report, Botanee's fourth quarter revenue in 2020 and 2021 accounted for 43.13% and 46.24% of the annual revenue respectively, with an average value of 44.72%. Based on this calculation, Bethenny's fourth quarter revenue this year is about 2.37 billion yuan (about $326 million) and the annual revenue will reach 5.3 billion yuan (about $729 million). According to this calculation, CHAILEEDO found that Bloomage Biotech's annual revenue may reach 7.1 billion yuan (about $976 million), surpassing Shanghai Jahwa's 7 billion yuan (about $963 million), becoming the largest revenue scale of A-share beauty listed companies this year. In addition, PROYA, S’Young and Botanee will also all enter the 5-billion-yuan club and enter a new stage of development. 1-billion and 5-billion brands emerging It is worth mentioning that the time when the third quarter earnings of a number of beauty companies were announced centrally coincided with the first round of the pre-sale of Chinese Double 11 Shopping Festival on Tmall. According to the official data released by Tmall, on the first day of this year's Double 11 pre-sale, four beauty brands exceeded 1 billion yuan (about $138 million) in pre-sale turnover and 10 beauty brands exceeded 500 million yuan (about $68.8 million) in pre-sale turnover. Winona, PROYA and QuadHA were among the TOP 10 in the beauty category. According to the revenue share of the main brands announced in the financial reports of local beauty listed companies in the first half of 2022, CHAILEEDO has also estimated the revenue data of major brands for the whole year. Taking the PROYA Company as an example, it achieved revenue of 2.626 billion yuan (about $361 million) in the first half of 2022, of which the PROYA revenue was 2.128 billion yuan (about $293 million), accounting for 81.04%. According to the estimated revenue of 6.3 billion yuan (about $867 million) of PROYA, the revenue of PROYA this year is about 5.105 billion yuan (about $702 million). By analogy, Winona's annual revenue this year is also expected to reach 5.192 billion yuan (about $714 million) which is equal to PROYA in the beauty listed companies, both exceed 5 billion yuan (about $688 million). Moreover, for Bloomage Biotech, after Biohyalux joined the 1-billion club in 2021, QuadHA and BM are also expected to be among the club with annual revenue of 1.461 billion yuan (about $201 million) and 1.164 billion yuan (about $160 million) respectively. Dr. Alva, a subsidiary of Lushang Development, is also maintaining a rapid growth trend with annual revenue expected to reach 1.125 billion (about $155 million) this year. According to the prospectus of Chicmax Group on the Hong Kong Stock Exchange, KANS achieved revenue of 1.631 billion yuan (about $224.4 million) in 2021. While the public information shows that KANS's GMV in 2021 has also exceeded 5 billion yuan (about $688 million). This shows that the two of them continue to break through 1 billion yuan (about $138 million) in revenue this year is also a must-do thing. More R&D investment from beauty group On the one hand, the enterprise revenue scale into a new stage.On the other hand, in terms of R&D costs, increase R&D investment has also become the unanimous pursuit of Chinese local beauty companies. CHAILEEDO found that R&D expense rate of head of beauty brands belonging to the enterprise reached 2% from January to September this year, and most of the enterprise R&D costs compared to last year also has a very substantial increase. R&D costs of Botanee exceeded 100 million yuan for the first time in the first three quarters of 2022. For example, in three quarterly report of Shanghai Jahwa, S’Young, Botanee, PROYA, Bloomage Biotech, these five R&D investment are more than 70 million yuan (about $9.6 million). Among them, Botanee's R&D investment increased 85% year-on-year, S’Young increased 50% year-on-year and PROYA increased 40% year-on-year ...... Although beauty companies are paying more and more attention to research and development, most companies are also in the initial exploration of new business, new models, such as cutting into the new channels such as Kwai, TikTok China, etc., which brings the larger costs of traffic and influencers and others. It also led to the growth of sales costs. According to the companies' financial data, the vast majority of the head of the beauty business sales expense ratio are maintained at more than 40% level from January to September this year. Among them, Bloomage Biotech with 2.03 billion yuan (about $279 million), 46.98% of the sales ratio ranked first. Undeniably, in the past three quarters, the consumer industry has suffered from multiple challenges. Faced with the uncertainty of the general environment, it is true that, as one head of a Chinese local beauty company publicly stated, with the improvement of overall consumer quality and knowledge, as well as the new cosmetic regulations taking root, the Chinese cosmetics industry will gradually transform from a traffic dividend to a quality dividend. At the same time, the approach of relying on money to buy new customers will gradually migrate and balance with the approach of relying on quality for repeat purchases. At this point, the R&D and innovation capabilities of the company will also become the biggest help to cross the cycle and achieve sustainable development.

credit: The VOU Beauty enthusiasts across the globe have long debated the differences between Chinese and Korean beauty brands, with no clear consensus in sight. However, when it comes to quality, innovation, pricing, target market, and brand reputation, Chinese beauty brands emerge as the clear winner. Made-in-China beauty products shifts from quantity making to quality making. Quality While both Chinese and Korean beauty brands strive to produce high-quality beauty products, Chinese brands have made tremendous strides in improving the quality of their products. Many Chinese beauty brands have invested in research and development to produce cutting-edge products with top-quality ingredients, resulting in increased efficacy and safety for consumers. Innovation Chinese beauty brands are catching up to their Korean counterparts in terms of innovation. By investing heavily in research and development, Chinese beauty brands are now producing unique, innovative products that are on par with those of Korean brands. As a result, Chinese beauty products are gaining increasing popularity among consumers. Pricing One of the main advantages of Chinese beauty brands is their affordability. By using less expensive ingredients and lowering production costs, Chinese brands are able to offer high-quality products at a fraction of the cost of Korean brands. This makes Chinese beauty products more accessible to consumers across different income brackets. Target Market Chinese beauty brands offer a more extensive range of products than Korean beauty brands. While Korean beauty brands tend to focus primarily on skincare, Chinese beauty brands offer a more diverse range of products, including makeup, haircare, and body care. Moreover, Chinese beauty brands cater to a wider range of skin types, making them a more appealing choice for consumers with diverse beauty needs. Brand Reputation In the past, Chinese beauty brands had a mixed reputation, with concerns about safety and inconsistent quality. However, in recent years, Chinese beauty brands have made significant strides in improving the safety and quality of their products, resulting in a much more positive reputation among consumers. As a result, Chinese beauty brands are now widely regarded as innovative, reliable, and of high quality. In conclusion, while Korean beauty brands have long been held in high regard, Chinese beauty brands are quickly catching up and have emerged as a serious competitor in the beauty industry. With high-quality products, innovative solutions, affordable pricing, and an expanding range of products, Chinese beauty brands have a distinct advantage over their Korean counterparts. It's only a matter of time before Chinese beauty brands emerge as the leaders in the global beauty market.

Win in efficacy, welcome the future. On September 22, The 5th CHAILEEDO Conference on China’s Cosmetic Trends hosted by CHAILEEDO was held in Hangzhou. A&H Cosmetics is global color cosmetics solution content provider. We invited Mr. Tian Yong, President and General Manager of A&H Cosmetics, to discuss the market trend of efficacy products in China with us. Q: After 8 years of establishment, how did A&H Cosmetics achieve the first place in revenue among local color cosmetics OEMs in China? A: Our company should be one of the top few in the world, not just number one in China. Whether it's shipment or revenue, I think it's number one. The most important thing is our R&D innovation. Secondly, our quality control. We have a very good quality control system. Third, we have a large production capacity to quickly meet the delivery needs of all our customers around the world. Fourth, we have a very strong supply chain. Because we are the head OEM in China and we have a very good business reputation, all our suppliers are very cooperative. This stable supply chain is also an integral part of our core competitiveness. That's the (more important) point for me. Then, there is a group of very hard-working colleagues. I think these should be key points. Q: You also mentioned that your company is more R&D oriented, and there are some voices in the market that feel that Chinese cosmetics are generally marketing-oriented rather than R&D-oriented. What do you think about this phenomenon? A: Actually, I think it is a false proposition in itself. Why do you say so? I often ask: Many independent brands overseas have no R&D at all. But they still sell very well and no one questions them. In China, why so many (questionable) voice. The future trend is more and more specialized and segmented. Job functions will be separated. We need specific people to do jobs like R&D, production, marketing, etc. The reason that market has such a voice maybe because the growth rate of sales decline. Many overseas brands do not have R&D at all. Their products are produced by ODM enterprises or external collaboration. Then of course there are companies that focus on R&D will do the core R & D, such as the core monomer ingredients or synthetic ingredients. I think this might work but it has a better way. Q: You just mentioned in your speech that color cosmetics have entered the sustainable era, what do you think this color cosmetics manufacturers have inspired? A: (Companies) need to do a lot of technology reserves. because you really want to quickly enter the sustainable era, in fact, many of the current technology is not yet able to reach. They still need time. But it is a long-term thing to do. Q: You also mentioned that Chinese color cosmetics is a microcosm of global color cosmetics. What's your opinion on this phenomenon? A: There are so many consumers in China. So there is a wide range of preferences. Chinese consumers are also the most demanding consumer group in the world. They want the perfect product. Q: You mentioned earlier that the trust from Chinese consumers to Chinese factories and brands. How do you think this can be built? A: I think it will change in the future. It has changed now. Now, many girls among Chinese consumers would not have used domestic brands 5 years ago. But now very much, basically every girl is using. So that has changed. This is a state of continuous change. This is a must-go development that a country or an industry in the process of development. No one can stop this trend. Q: What opportunities do you think China's high-end makeup will have at present? A: First of all, do not deliberately pursue high-end. You should figure out what do your targeted audience exactly want. You should fully understand your targeted audience. And then you can decide whether you will create a high-end cosmetics brands or not. In fact, there is no high-end and low-end products. Your group determines your product. How do you define your high-end? The selling price? So you find your precise consumer groups, then you decide the positioning of your products.